Inside the eSIM shift: what’s changing behind the curtains
For many years, the physical SIM card did its job, it acted as our passport to mobile networks, defining our digital identity in a small piece of plastic, but it also came with limits: swapping SIMs by hand, relying on physical distribution, and very little flexibility for a world that moves constantly. But this model is now reaching its end.
And nowhere is this shift more visible than in travel: today’s travelers expect to land in a new country, switch on their phone, and be connected instantly. They don’t want to queue at airport kiosks, they don’t want to swap SIM cards and risk losing them, and most importantly, they don’t want surprise roaming bills waiting for them after the trip. At Holafly, this is the experience we think about every day.
But there is another story running in parallel, one that most travelers never see. It is the story of how the telecom industry is changing behind the scenes, how new business models are emerging, and why a small piece of software is quietly reshaping much more than travel.
That is the starting point of eSIM Talks, a new content series where host Rafael Junquera, Co-Founder & Editorial Director of TeleSemana, sits down with industry experts to explore what is happening behind the curtains of the eSIM ecosystem: the travel eSIM market, regulation, product innovation, and the future of roaming.
In this first episode, Rafael is joined by Chris Hills, VP of Carrier & Operations at Holafly, and Mohit Agrawal, technology influencer and Director of AI & IoT at Counterpoint Research. Together, they explore the transition from physical SIM cards to eSIM from three complementary angles: traveler experience, operator reality, and the wider connected-device economy.
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From hardware to software: why this shift matters now
“You know that stupid metal thing that you had to put into the side of the phone, which you never had on you when you needed to change the SIM? That was awful,” said Chris Hills. That small frustration says more than it seems: the shift from physical SIM cards to eSIM is often explained as a convenience upgrade, the plastic cards go away, and you don’t need to worry more about this metal pin you can never find when you actually need it.
But convenience is just the surface; physical SIMs were built for a different era where connectivity depended on physical distribution, local retail, and manual processes. Changing operators meant swapping cards, going abroad meant buying a new one. Over the years, the industry thought they were innovating but the only thing they did was reduce the size of the SIM cards.
eSIM changes that system entirely by turning connectivity into software, and removing the physical layer that has constrained telecom for decades. Activation has become easy and in one-click, and switching networks remote.
“If you look at the entire customer journey, eSIM is the last missing piece. As long as you have a physical SIM, you cannot have a fully digitally transformed journey.” Mohit Agrawal had it clear: this isn’t an incremental improvement, it’s a structural break. Once connectivity becomes software, everything else starts to move faster: distribution, product design, global reach, and user expectations. What looks like a small technical change is actually a shift in how an entire industry operates.
A new generation of connectivity players
Once connectivity stops being a piece of plastic you have to ship, store, and physically hand to someone, the market doesn’t just become more convenient, it opens up. “What eSIM has enabled is the disintermediation of the connectivity stack. It has enabled the rise of digital-first and global connectivity players.” highlights Mohit.
If users can activate connectivity digitally, the old barriers of retail, SIM inventory, and country-by-country logistics lose relevance almost overnight. Travel eSIM brands are one clear outcome, but the impact goes further; fintechs, platforms, and digital-native companies can now embed connectivity into their services without owning stores or shipping SIM cards.
Mohit also points to a second unlock that often gets overlooked: in-factory provisioning. The idea that devices can ship with bootstrap connectivity already installed changes onboarding completely. Instead of connectivity being something you set up after purchase, it becomes something the device simply has from the moment you unbox it. That’s a subtle shift, but it’s the kind of shift that makes new business models possible, because it reduces friction at the most critical moment: first use.
Why operators hesitated, and why that is changing
eSIM transition didn’t happen overnight, eSIM has been around for almost 15 years, and the industry has been debating during all those years. The honest question is “what took so long for the whole industry to align that eSIMs were the next step?”
It’s important to point out that eSIM provisioning is not free, and that detail matters more than most people realize. “The operators end up paying a few cents for every time a SIM profile is downloaded” highlights Mohit.
With a physical SIM, the cost is largely one-time: you can move the same card from one phone to another. With eSIM, lifecycle events such as changing devices can trigger repeated provisioning costs. “That doesn’t make eSIM a bad technology, but it does mean operators had to rethink processes and economics that had been stable for decades”, points out also Mohit.
There was also a fundamental fear that travel eSIM would cannibalize roaming revenue from operators, but that assumption has not fully held up. “This is not carving out existing business. This is new business. These are silent roamers who are waking up” said Chris, “Many travelers previously avoided roaming entirely and stayed on Wi-Fi because prices were prohibitive. Travel eSIMs gave them a reason to stay connected, creating incremental demand rather than simply shifting usage.”
That changes the entire conversation. If the travel eSIM market is partly converting Wi-Fi-only travelers into connected travelers, then the category isn’t only redistributing revenue, it is expanding demand. And once operators begin to see that, the mindset shifts from “how do we protect roaming?” to “how do we participate in inbound connectivity?”, already some operators are now exploring exactly that: how they can benefit by offering incoming travelers an eSIM product rather than forcing them into physical queues at the airport.
And at the same time, the market started sending a clear signal that the direction was inevitable. Indeed Rafael captures it in a line that feels very accurate: “The market has decided we have to move away from this and go virtual.” The shift isn’t driven by one company or one product, but by the combined pressure of a whole industry: device manufacturers, digital-first user expectations, and a world where connectivity increasingly needs to behave like software.
The experience gap is still real, and it explains why travel eSIM grew so fast
Even though eSIM is clearly the direction of travel, the episode makes it obvious that the experience is still uneven. Chris shares a story that feels almost absurd in 2026: years ago he tried to get an eSIM for a tablet and the operator told him they would send it, by post, as a QR code printed on paper. When he scanned it, it didn’t activate. Support gave incorrect advice, including the claim that you can only have one eSIM at a time. The result was a delay that should never exist in a digital-first experience: “It took me 48 hours to activate my eSIM.”
That gap explains why the travel eSIM category has grown so quickly as it solved a problem that traditional operators had not fully addressed: delivering a smooth, fast, and predictable experience at the moment it matters most, which is when you land in a new country. If eSIM is supposed to be instant, then delays, confusion, and incorrect support create a trust problem. And that’s where travel eSIM providers have been able to win.
Chris makes another point that brings this down to human reality: not everyone is a heavy data user. Some travelers just want to arrive, connect, and handle essentials: messaging family, accessing a bank account, navigating, or calling a ride. “Some people use a lot of data. Others just want to land, send a message, access their bank, or let their family know they arrived safely. In all cases, it’s about peace of mind.” And that’s where travel eSIM providers have been able to win.
How travel accelerated adoption behavior
Across markets including the US, Canada, parts of Europe, Japan, and others, only 35% of people were aware of eSIM, highlighted Mohit from a Counterpoint Research. And even among those who were aware, just 39% were actually using it.
One of the most revealing parts of the conversation is how travel changes user behavior. Mohit notes that in many regions, people first try eSIM when traveling, driven largely by the gap between traditional roaming prices and eSIM alternatives. Once they have a positive experience abroad, they become more open to using eSIM in their everyday mobile plans.
Rafael frames it in human terms: expectations shift depending on perceived fairness. When roaming fails at a high price, frustration is intense. When an eSIM fails, tolerance is higher because it feels affordable, flexible, and user-centric.
Chris sees this reflected in Holafly’s usage patterns: “Some people use a lot of data. Others just want to land, send a message, access their bank, or let their family know they arrived safely. In all cases, it’s about peace of mind.”
Holafly’s perspective: designing for peace of mind
Holafly’s role is quite clear, we don’t position eSIM as the product itself, but as the mechanism that makes an experience possible. “We’re not focusing on the data. We’re focusing on providing peace of mind to our users”, says Chris. That idea becomes more tangible when he describes how different travelers use data, some want unlimited because it removes all mental math, others instead only need access to essentials, but all of them need it reliably at the moment they arrive.
In a market where data can feel like a commodity, the way you remove anxiety becomes the real value. Chris links that directly to Holafly’s approach: seamless activation, unlimited plans, and features such as Always On, which are built to avoid the worst-case scenario of being fully cut off when you need it most. For Holafly, this is not about selling more data, it’s about reducing cognitive load.
The deeper point is that eSIM makes it possible for connectivity to behave like software, but the industry still has to decide what kind of experience it wants to build on top of that. eSIM creates the opportunity, but are the companies who compete on how they use it.
Beyond travel: why eSIM matters for the wider economy
IoT has long relied on remote connectivity, but standards have evolved slowly, and the friction has been significant. Today, eSIM is beginning to unlock more scalable ways of managing connectivity across devices that cannot rely on manual SIM replacement.
Automotive and IoT have been the earliest drivers, but industrial sensors, agriculture, maritime use cases, and smart infrastructure that depend on connectivity and cannot rely on manual SIM replacement, will be following as the industry is evolving.
Mohit adds another dimension that most consumers never see: regulation. In some countries, permanent roaming beyond the 90 days period is not allowed, so in that context, eSIM becomes more than a convenience. It becomes a compliance enabler, because “with eSIM, you can actually orchestrate the change of the SIM on the fly to a local profile” says Mojit, “and that capability is critical for devices deployed long-term, especially in remote or industrial environments.”
This is where eSIM stops being a travel feature and starts looking like infrastructure; if you can change profiles remotely, you can deploy connected devices at scale without physically touching them. You can operate across borders and build services on top of connectivity that are far more dynamic than the physical SIM world ever allowed.
Looking ahead, iSIM pushes this evolution further by shrinking connectivity components again and unlocking even more form factors. Smaller devices. More always-connected objects. Less friction. This is where eSIM stops being a travel feature and becomes a key piece in the digital economy.
What the next few years are likely to bring
For most travelers, eSIM appears as a smoother setup step before a trip. But the story is deeper: the telecom industry is gradually shifting from a world built around physical distribution to one built around digital provisioning. It has taken more than 15 years because it touches economics, regulation, and the structure of the ecosystem itself.
The long-term implication is not simply that SIM cards will disappear, but also that connectivity is becoming a layer that can be embedded into other products, other industries, and other forms of mobility. Once connectivity becomes software, innovation moves faster, and the industries around it reorganize.
That’s what eSIM Talks is ultimately trying to capture: not just what eSIM is, but why it matters, why the shift took so long, and what becomes possible once connectivity is no longer a piece of plastic, but a service that can be activated, managed, and orchestrated in real time.
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